Law:

Section:

Section 68, read with section 256, of the Income-tax Act, 1961 - Cash credits - One J was alleged to have advanced loan to assessee - His statement was r ecorded by ' ITO - Tribunal held that he was not in a position to accu mulate fund to the extent of advance made to assessee - Whether Tribunal's finding was one of fact based on consideration of relevant evidence and was not perverse, so that no question of law arose out of Tribunal's order - Held, yes Section 256, read with section 68, of the Income-tax Act, 1961 - Reference -Question of fact - Whether in view of facts stated under heading 'Cash c redits' no question of law arose from Tribunal's order - Held, yes Facts During the assessment proceedings before the ITO, one J, who was alleged to have advanced a certain amount to the assessee, was examined as a witness. The Tribunal held after considering J's statement and other evidence on record that J was not in a position to accumulate funds to the extent of advance made to the assessee. The Tribunal further refused to make a reference under section 256(1) questioning this finding. On application under section 256(2) : Held The explanation of J, who was alleged to have advanced the loan to the assessee, was considered by the Tribunal in arriving at the finding mentioned above. It could not be said that the finding was absurd or that no reasonable man could come to that conclusion on the basis of the evidence on record. The Tribunal's finding was neither perverse nor had the material on record been ignored. The finding arrived at was essentially one of fact, and no question of law arose out of the Tribunal's order. Cases referred to CIT v. K.S. Kannan Kunhi [1973] 87 ITR 395 (SO) and Addl. CIT v. Noor Mohd. & Co. [1974] 97 ITR 705 (Raj.). R.L. Goyal for the Applicant R.N. Surolia for the Respondent. . ORDER Prasad, J. - The argument advanced by Shri Ratan Lal Goyal, the counsel for the assessee, is that the material on record has not been considered by the Tribunal and, as such, the finding of fact arrived at by the Tribunal is vitiated. His further submission is that Jagdish Prasad who is alleged to have advanced a sum of Rs. 20,000 to the assessee, was…

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